News Brief: Corporate Travel Buyer Study Affirms NDC Need

Geneva – The International Air Transport Association (IATA) announced the results of a study of global corporate travel buyers showing that while the vast majority maintain a neutral opinion concerning the New Distribution Capability (NDC) they recognize the opportunity the standard offers. Moreover, the study found that there is a strong desire among travel buyers for greater in-depth knowledge about NDC and the implications that it will have for their business activities.

NDC is a travel industry-supported program launched by IATA for the development and market adoption of a new, XML-based data transmission standard that is intended to enhance communications between airlines and travel agents.

The study was conducted by Festive Road on behalf of IATA. It is based on interviews with 17 corporate travel buyers from five continents representing direct responsibility for in excess of $3 billion per annum in business travel expenditure including an estimated $1.9 billion in air travel.

“We have an opportunity for greater interaction with the corporate travel buyer community who are key partners in the travel value chain. The newly-formed IATA Travel Manager Advisory Group will help us to build a better understanding of the capabilities of NDC and the concerns of corporate travel buyers. By enabling access to airline content that currently is available only on airline websites, NDC will add much more value to the services that travel buyers provide to their companies”, said Aleks Popovich, IATA Senior Vice President, Financial and Distribution Services.

In the study, travel buyers were asked for a wish-list of ways in which NDC could improve their efficiency. They cited having access to all content, in a user-friendly format, available via mobile, and compliant with company rules. The most commonly voiced concern was that implementation of NDC “will increase the practice of price and content variance by channel.”

“Current processes make it difficult for travelers and corporate buyers to easily compare airline ancillary products and the full service options across multiple airlines. The NDC Standard will address many of these concerns,” said Popovich. “While IATA has no role in the commercial decisions of individual airlines, the opportunity here is that the NDC Standard will enable a more transparent shopping experience, without negatively impacting corporate travel policies and controls,” added Popovich.

The report also identified six current “pain points” corporate travel buyers say impact their effectiveness in managing travel for their businesses:

Communication: Concern over supplier-direct communication with travelers was most commonplace, as was the use of airline and hotel loyalty programs, to facilitate supplier-traveler direct communications.

Distribution and Content: Frustration with the content provided to their companies was cited. Issues ranged from content being unavailable through indirect channels and available elsewhere to travelers, to the challenges surrounding fare and ticketing rules.

Intermediaries and Content: Issues with the self-booking tool experience and concerns over the future viability of travel management companies and GDSs in their current form were mentioned.

Traveler and Booking Experience: Buyers are increasingly having to respond to the desires of the traveler rather than spend their time focusing on the needs of the corporation across sourcing, policy & compliance.

Costs: In addition to significant increases in hotel costs and a focus on non-air costs, buyers also referenced a reduced sense of leverage.

“NDC does not directly relieve all of the ‘pain points,’ cited by the travel buyers but it is clear that their vision of NDC’s potential aligns well with the goals of the program. We have a tremendous opportunity to increase our outreach to the corporate travel buyer community and engage their indirect supply chain to facilitate greater understanding and reap the benefits of NDC,” Popovich said.